Britain has never seen anything like it. Liz Truss has resigned just forty-four days after being appointed prime minister. The previous record for the shortest premiership, 119 days, had stood for almost two centuries, and its holder, George Canning, had the excuse that he died in office.
The big question is whether British politics has experienced an aberration or a lasting change. Will the past few weeks be remembered as a bad dream, never to be repeated, or has it ushered in a new era of volatility? Do the words on the cover of the latest edition of the Economist—“Welcome to Britaly”—reflect the real prospect that centuries of political stability have come crashing to an end?
An optimist would point to the brutal way in which reality has destroyed fantasy so comprehensively that it will surely never be repeated. The most dramatic example was a catastrophically misjudged package of tax cuts, most notably for the better off, announced on September 23. This spooked the financial markets, which feared that government borrowing would get out of hand. The value of the pound fell. Interest rates rose sharply. The government’s opinion poll ratings collapsed.
Attempts were made to calm the markets, voters, and conservative parliamentarians by withdrawing some of the least popular proposals. But in the end, Truss had to dismiss Kwasi Kwarteng, the chancellor (finance minister) and a close friend and ally of Truss for some years. The new chancellor, Jeremy Hunt, promptly scrapped almost all of Kwarteng’s measures and promised to restore fiscal discipline to the government’s finances. He warned of “eye-watering” decisions that would be needed to raise taxes and reduce public spending.
This brought a degree of stability to the financial markets but left interest rates significantly higher than they had been just weeks earlier—and higher than they would have been had Kwarteng never set out on his tax-cutting spree. Economists talked of Britain’s “moron risk premium,” the extra that Britain’s government would continue to have to pay despite the return to more orthodox policies. The fear is that Britain’s reputation for fiscal responsibility, lost so abruptly, will take years to recover.
A second event, quickly overtaken by Truss’s resignation, also speaks to the aberration-versus-sea-change issue. Twenty-four hours before she fell on her sword, the prime minister sacked her home secretary, Suella Braverman. The stated issue was Braverman using her private email for sensitive government business. The underlying issue, which had led to a furious row the night before, was that Braverman wanted to reduce immigration sharply—an ambition long held by right-wing Conservatives. But Truss knew that her own ambition for rapid economic growth (the driving force behind her and Kwarteng’s tax-cut strategy) would require hundreds of thousands of new immigrants a year to come to Britain to do the jobs that would deliver such growth.
On the face of it, Britain should now revert to some kind of normality, with fiscal stability and an immigration policy driven by economic need rather than a nativist desire to curb the number of foreigners settling in Britain. But that analysis misses a crucial third factor.
The brutal power of the global financial markets has taught us all a lesson that mid-sized nation states have limits when deciding their destiny. Six years ago, the United Kingdom voted with a 52 percent majority to leave the European Union. The slogan of the leave campaign was “take back control.” Britain would be able to make its own decisions on everything from trade to immigration.
This Brexit prospectus has now been exposed as hopelessly unrealistic. Even before the latest crises, polls found a three-to-two majority saying Britain was wrong to leave the EU. The latest controversies over taxes and immigration have underlined just how limited are the options facing any British government.
So, can we be confident that a new sense of realism will restore calm and rationality to British politics? Possibly, but not certainly. Right-wing Conservatives remain a force within their party. Truss was their victorious candidate for leader. They show few signs of remorse for the collapse of their dreams of a low-tax, low-immigration future (even though Truss herself ended up betraying them on immigration).
In the short run, the new prime minister, whoever they are, will have little option but to tread carefully in order to prevent further financial turmoil between now and the next election, due within the next two years. The Conservatives will almost certainly lose anyway. But the ideological passions of their right-wing will persist. Whether they will regain control of their party in opposition is an open question.
In short, for the next few years, what has happened in the past few weeks will seem like an aberration. The UK might well start to edge closer to the EU, moderating Brexit, though not reversing it any time soon. But can the fears (or, depending on your view, hopes) of a sea change, overturning decades of pragmatism and carefully implemented reform, be ruled out in the long term? That is far less certain.